Bitcoin price steadies after spot ETF anticipation

Crypto markets steadied this week, after exhibiting high volatility last week. Anticipation on the approval of Bitcoin spot exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) triggered market volatility last week. 

Bitcoin price surged last Thursday as the first spot Bitcoin ETFs gained approval by the SEC. The SEC approved 11 applications, including those from BlackRock, Ark Investments, and Fidelity. News of the approval boosted not only Bitcoin but other cryptocurrencies as well. The enthusiasm over the approvals did not last long, however, and a massive Bitcoin selloff was triggered on Friday.

The approval of the first spot Bitcoin ETFs is drawing investors’ attention and is likely to bring more institutional and retail money into crypto markets. Spot Bitcoin ETFs give access to the cryptocurrency to traders through a regulated product, eliminating the risks of buying from unregulated exchanges. 

Bitcoin skyrocketed to $48,800, its highest level since January 2022, after the approval of the first spot Bitcoin ETFs last Thursday. Bitcoin price suffered a massive correction on Friday though, retreating to the $42,000 level over the weekend. Bitcoin price steadied this week, trading around the $43,300 level on Tuesday. If BTC price declines, support can be found near $41,600, while resistance may be encountered near $49,000. 

Ethereum gained strength on Tuesday, climbing above the $2,600 level. If Ethereum's price declines, it may encounter support near $2,300, while if it increases, resistance may be encountered near $2,700.

Crypto markets are under pressure by rising geopolitical tensions. The war between Israel and Hamas is threatening to spill over the Middle East as tensions rise in the Red Sea area. Concerns that the Geopolitical crisis in the Gaza area may spread to neighboring countries drive risk sentiment down putting pressure on risk assets. The US and the UK have launched a coordinated action against Houthi rebels in Yemen. The coalition delivered a series of air and sea strikes against Houthi targets in Yemen, risking retaliation from Iran.

Increases in central banks’ interest rates are putting pressure on risk assets. Most major central banks, however, are hitting pause on rate hikes, propping up crypto markets. The Fed kept interest rates unchanged at its December meeting, within a target range of 5.25% to 5.50%. 

BTC/USD 1h Chart

ETH/USD 1h Chart

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: